Targeting Confident Consumers? Focus on High-Level Product Features

Confident consumers pay more attention to advertisements and product information that focus on high-level features of a product, according to a new study in the Journal of Consumer Research. Less confident consumers, however, focus on the basics.
“When we feel confident, we think that abstract information is more relevant to us. But when we feel doubtful, we think that concrete information is more relevant. The more relevant we perceive information to be, the more we will focus on it,” write authors Echo Wen Wan (University of Hong Kong) and Derek D. Rucker (Kellogg School of Management – Northwestern University).
The authors conducted a series of experiments to examine how psychological confidence affects consumers’ attention and scrutiny of product information.
In one experiment, the authors induced participants to feel either confident or doubtful and then asked them to describe the action of “locking the door.” Confident people tended to describe it in terms of its high-level meaning of “securing the house,” whereas doubtful people tended to describe it in terms of its concrete action of “putting a key in the lock.”
In another experiment, confident consumers paid more attention to an ad for a health club when the message was focused on the idea of long-term health, a high-level and abstract benefit. They paid less attention to the ad when the message was focused on the idea that they could enjoy daily workouts, a low- level and concrete benefit. When consumers felt doubtful, the opposite occurred and they paid more attention to an ad when it discussed concrete as opposed to abstract benefits.
“Feeling highly confident prompts consumers to consider things from a global perspective and focus on the high-level and essential aspects of products, whereas feeling less confident or uncertain makes people focus on low-level and contextual details,” the authors conclude. 

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Targeting Confident Consumers? Focus on High-Level Product Features

Don’t Burn Out: Enjoy Your Favorite Products More By Consuming Them Less Frequently

Consumers enjoy products more in the long run if they don’t overuse them when first purchased, according to a new study in the Journal of Consumer Research.
“Consumers are naturally prone to consume products they enjoy too rapidly for their own good, growing tired of them more quickly than they would if they slowed down,” write authors Jeff Galak (Carnegie Mellon University), Justin Kruger (New York University), and George Loewenstein (Carnegie Mellon University).
We often face decisions about how rapidly to consume products we enjoy: how quickly to eat a favorite dessert; how often to listen to a favorite song; or how frequently to play a new video game. But do we make choices that maximize our enjoyment of such products? It turns out that there may a selfish reason to resist the temptation to overindulge.
The authors asked consumers to eat a well-liked food such as chocolate or play an exciting video game either at their own pace or at longer intervals. When consumers were given the ability to choose a rate of consumption and that decision was constrained to force them to consume slowly, they enjoyed the overall experience more than those who either chose their rate of consumption in an unconstrained manner or those whose rate of consumption was chosen for them.
Because consumers choose to consume too quickly, they don’t appreciate that spacing out consumption decreases satiation and thereby increases enjoyment. Paradoxically, we tend to make choices that will bring us less pleasure overall.
“When you are lucky enough to be able to choose how often to consume the things you enjoy, space out your consumption. Not only will the experience last longer, but it will be more enjoyable as well,” the authors conclude. 

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Don’t Burn Out: Enjoy Your Favorite Products More By Consuming Them Less Frequently

Ownership Increases the Value of Products: How Does Gender Matter?

The price a consumer will pay for a product is often significantly less than the price they will accept to sell it. According to a new study in the Journal of Consumer Research, this occurs because ownership of a product enhances its value by creating an association between the product and consumer identity.
“Our studies support the idea that ownership enhances the attractiveness of a product because ownership creates an association between the item and the self,” write authors Sara Loughran Dommer (Georgia Institute of Technology) and Vanitha Swaminathan (University of Pittsburgh).
In several studies, the authors found a link between possessions and consumer identity. They also discovered that men are more likely to consider a product’s association with specific social groups when making a purchase. “Men strive to differentiate themselves and group distinctions are more significant for them. In contrast, women are focused on forming connections and less likely to classify themselves as separate from others. They are less likely to purchase products because of an association with a particular social group,” the authors write.
Businesses can benefit from creating feelings of ownership through promotional strategies such as free trials, samples, and coupons. For instance, a consumer may be more willing to purchase a couch if they are offered a free trial, clothing stores increase sales by having customers try on items, and sporting goods stores could allow consumers to try out equipment in the store to boost sales.
However, companies wanting women to identify with and purchase their brands need to work harder to emphasize the identity differences across brands. A good example would be Apple’s recent Mac versus PC advertising campaign that depicted the distinct identities of the two brands.
“If ownership increases the value consumers place on products, then companies could benefit from any action that creates feelings of ownership before actual purchase. Our findings regarding gender differences also suggest that in certain situations companies may benefit from prompting female consumers to make intergroup comparisons,” the authors conclude. 

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Ownership Increases the Value of Products: How Does Gender Matter?

History of Marketing Channels

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History of Marketing Channels

How Weather Conditions Change Our Shopping Behavior

Weather conditions can play a big role when consumers are planning to purchase a car or a home.

That’s the message from a paper published this month and co-authored by Jorge Silva-Risso, an associate professor of marketing at the University of California, Riverside’s School of Business Administration.

Among the authors’ findings, which control for seasonality:

• A 20 degree increase in temperature equaled an 8.5 percent increase in convertibles sold.
• In the two to three weeks following a snow storm of about 10 inches, the percentage of four-wheel-drive vehicles sold increased 6 percent.
• A 20-degree increase in temperature leads to a 2.1 percent reduction of black vehicles sold. And moving from overcast to clear weather reduces the sale of black vehicles by 5.6 percent.
• A swimming pool can increase the value of a home by $1,600 if it’s sold in the summer instead of the winter.

“People often talk about impulse buying,” Silva-Risso said. “Our research shows it is real. Our research also shows that under certain conditions consumers would do best to avoid that impulse.”

Silva-Risso, who has been at UC Riverside since 2003, previously worked at J.D. Power and Associates and has done contract work for General Motors, Chrysler, Ford, Honda, Toyota and BMW.

He co-authored the paper with Meghan R. Busse, an associate professor at Northwestern University, Devin G. Pope, an associate professor at the University of Chicago, and Jaren C. Pope, an assistant professor at Brigham Young University.

The paper, called “Projection Bias in the Car and Housing Markets,” is part of a working paper series published by the National Bureau of Economic Research.

Projection bias refers to the tendency to overpredict the degree to which future tastes will resemble current tastes. For example, the popular adage “never shop on an empty stomach” is a caution against projection bias: consumers are likely to overpredict the degree their future selves will appreciate the purchases that their current selves crave.

For this paper the authors used data from more than 40 million new and used vehicle transactions. That represented a sample of about 20 percent of all new car dealerships in the United States from Jan. 1, 2001 to Dec. 31, 2008. The housing dataset included more than 4 million single-family residential properties that sold in the United States between 1998 and 2008.

From a policy perspective, the results of the paper suggest that consumers would benefit from laws designed to help them better evaluate their decisions. For example, laws that allow consumers a “cooling-off period” for durable goods or goods for which consumers sign extended contracts may provide significant benefits.

The Federal Trade Commission has a “cooling-off rule” to deal with high pressure sale situations such as door-to-door sales. However, the rule does not apply to real estate and automobile sales even though there clearly can be high-pressure sale situations for costly items.

The authors’ findings also suggest that projection bias may be prevalent in other important decisions – such as whether to get married, take a job or have a baby – that are similarly distinguished by having large stakes, state-dependent utility, and low-frequency decision-making.

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How Weather Conditions Change Our Shopping Behavior

The Perils of Multitasking

Multitasking is a way of life...but is it as efficient as we think?



Please Include Attribution to OnlineColleges.org With This Graphic

Thanks to Peter Kim and OnlineColleges.org for this one.

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The Perils of Multitasking

Augumented Reality - The Possibilities

The possibilities of augumented reality are just about to be uses in several apps for smart phones and games. This is a step in morphing the digital life and real life and has many uses as I have covered in previous posts, like the one on "the dictionary of the future", or the Coke product display. The following video is made by two Israeli student filmmakers, that explores the potential of augumented reality in the future.

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Augumented Reality - The Possibilities